GVK currently holds 12%, which it acquired at Rs4.85B (US$100M) from Zurich Airport. We see potential to hike its stake to controlling levels of 44-49% in a few quarters from now, as it may take over the share of L&T (17%, via ZA) and Siemens (40%, partly locked in). GVK has publicly stated its intent to do so.
Post this purchase, GVK would have 2 operating airports including Mumbai, 3 operating power projects of 881MW in AP and Jaipur-Kishengarh expressway.
In our view, concrete property development plans around Mumbai would be an important catalyst. Our current valuation of Rs12.3/shr builds in an NPV of just Rs3950/sft, compared to prevalent rates of Rs20-25K/sft, given the lack of concrete master plan. With the completion of state elections and better flexibility on land acquisition, we believe time is ripe for a potential announcement.